Directors chapter summary |
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| 1 | Only individual to be directos - sec.253 i.e firm , body corporate , association cannot be apoointed as directors | ||||||||
| 2 | DIN | ||||||||
| It is mandatory to have DIN | |||||||||
| Application shall be made to CG in such form and manner including electronic form. | |||||||||
| CG shall allot DIN within 1 month of receipt of application. | |||||||||
| Prohibition to obtain more than one DIN | |||||||||
| Intimation of DIN to the companies within 1 month of receipt frm CG. | |||||||||
| Company shall intimate ROC or any authority as prescribed by CG within 1 week of receipt of intimation of DIN by it from its directors. | |||||||||
| Obligation to indicate DIN in returns , information particulars it it contains the reference of directos. | |||||||||
| 3 | Executivedirector | means who are in the whole employment of the company e.g., managing director, whole time director. | |||||||
| Non Executive director | means who are not in the employment of the company e.g, professional directors, nominee directors. | ||||||||
| 4 |
Qualification of shares - Sec 270. |
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| No statutory reuqirement to hold QS as per the act | |||||||||
| But it is to be held only if so required by the articles. | |||||||||
| Then it must be held within 2 months of appointment as per sec.270 | |||||||||
| Articles cannot increase or decrease the period given as per sec.270. if it provides then it is void. | |||||||||
| Nominal value of QS shall be Maximum Rs.5000 or the nominal value of 1 share where it exceeds Rs.5000/ 1 share as per reg.66 of Table A | |||||||||
| Directors expemted to hold QS are SSD, Nominee director appointed by CG, Nominee director appointd by finaical institution (statute), direcotr who is specially exemted by articles. | |||||||||
| Increase in the amount of qualification shares binding on the director if he is not already qualifed as on the date of increase | |||||||||
| Provisions application in the absense of any provisions in the articles - joint holdings, QS can be mortgaged, QS can be equity or preference, beneficial ownership not required. | |||||||||
| Bearer of share warrant shal not be deemed to be a holder of QS | |||||||||
| Sec. 270 does not apply in the case of private companies in other words if the article sof Pvt co. Provides for QS then director must obtian as per the time and amount specified in the articles. | |||||||||
| 5 | Qualifications of director | No educational or otherwise qulifications is required | |||||||
| No age limit has been prescribed under the act for appointment as a director or compulsory retirement of a certain age except for MD, WTD. | |||||||||
| 6 | Disqualification of dirctor - sec.274 (Applicable to all companies) | ||||||||
| unsound mind | |||||||||
| adjudged insolvent | |||||||||
| applied for insolvency | |||||||||
| Non payment of calls for 6 months or more from the last due date. | |||||||||
| Imprisoned for 6 months or more for an offence involving moral turpitude and a period of 5 years has not lapsed from the date of expiry of sentence. | |||||||||
| Order of court u/s 203 on the of ground og fraud or misfeasance in relation to a company and a period of 5 years not lapsed from the date of expiry of sentence. | |||||||||
| Disqualification appliable to public company only - Sec. 274 (1) (g) | |||||||||
| Directors of a public ompany shall be disqualified for appointment or reappointment in any other public company for 5 years | |||||||||
| if the public public in which he is already a director does not file | |||||||||
| the annual accounts and annual returns for any continous three Fys | |||||||||
| or | |||||||||
| fails to repay its deposit or interest thereon on due date or redeem its debentures on due date or pay dividend and such failure continues for 1 year or more. | |||||||||
| Notes : - No vacation of office of defaulting company and any other company even if sec 274 1 (g) is attracted. | |||||||||
| Director can escape from disqualifcation if he resigns before that. | |||||||||
| 7 | Vacation of office by directors - Sec. 283 Applicable to all companies | ||||||||
| unsound mind | |||||||||
| adjudged insolvent | |||||||||
| applied for insolvency | |||||||||
| Non payment of calls for 6 months or more from the last due date. | |||||||||
| Imprisoned for 6 months or more for an offence involving moral turpitude and a period of 5 years has not lapsed from the date of expiry of sentence. | |||||||||
| Order of court u/s 203 on the of ground og fraud or misfeasance in relation to a company and a period of 5 years not lapsed from the date of expiry of sentence. | |||||||||
| A person who acts in contravention of sec. 295. i. e accepting a loan , or any guantee or security for a loan from a public company in contravention of sec. 295. | |||||||||
| A person who acts in a contravention of sec.299. where a director fails to discloses his interest in any contract or arrangement. | |||||||||
| A person who is removed from the office of a director u/s 284. | |||||||||
| A person who fails to obtain QS u/s 270. | |||||||||
| A person who having been appointed a director by virtue of his holding any office or other employment in the company, cease to hold such office or employment | |||||||||
| A person who absents himself , without obtaining leave of absence from the Board | |||||||||
| from 3 consecutive BMs, or | |||||||||
| from all the BMs for a continous period of 3 months, whichever is longer | |||||||||
| Notes ; - | Points highlighted in italics shall not take effect | ||||||||
| for the first 30 days where any appeal is preferrred within 30 days, until such appeal is disposed of, | |||||||||
| for 7 dys as reckoned from such day when the first appeal is disposed of, | |||||||||
| where any further appeal is preferred within 7 dyas, until such further appeal is disposed of…. | |||||||||
| Effect : - | No opportunity of being heard is reqd to be given to the director | ||||||||
| Board is not required to pass a resolution to the effect that the office of a director has been vacated. | |||||||||
| Board has no power to waive any ground of vacation of office. | |||||||||
| Note ;- | Private companies may provide additional grounds of vacation of office. | ||||||||
| 8 | Number of Diretors - Sec. 252 | ||||||||
| Minimum | Maximum | ||||||||
| Public company | 3 | Not presecribed as per act | |||||||
| Private company | 2 | Not presecribed as per act | |||||||
| Note : - Articles may specify minimum number of directors which may be higher than that specified u/s 252. | |||||||||
| 9 | Increase or Reduction in Number of Directors - Sec. 258 | ||||||||
| Increase or decrease in the number of directors shall be done by passing OR but it should be within the limits fixed by the articles. | |||||||||
| Increase in number of directors beyond the limits of fixed by the articles requires amendement of article by SR. | |||||||||
| 10 | Increase in Number of Directors - sec. 259 | ||||||||
| No increase in number of directors shall have effect unless approved by CG. | |||||||||
| However no apporval of CG is required if | |||||||||
| the number of directors as increased does not exceed 12. | |||||||||
| the number of directors as increased does not exceed the maximum number of directors specified in the articles as first registered"/ articles as on 27.07.1951. | |||||||||
| Non - Applicability | Notes | ||||||||
| 1 | Private company | Alternate directors, additional directors, casual vacancy director are exmepted from this section. | |||||||
| 2 | Government company | ||||||||
| 3 | Company licensed u/s 25. | ||||||||
| 11 | Restrictions on number of Directorships - Sec. 275 | ||||||||
| No person can be a director in more than 15 companies. | |||||||||
| When a person already holding 15 directorship is appointed as a direcotr in any other company | |||||||||
| The new appointment shall not take effect unless within 15 dyas of such appointment the director concerned vacates any of his earlier directorships | |||||||||
| The appointment shall become void if the office is not so vacated. | |||||||||
| Directorships excluded u/s 278 | |||||||||
| Directorship in pure privte company ( i.e pvt co which is not a subsidiary or holding of a cpublic company) | |||||||||
| Directorship in an unlimited company | |||||||||
| Directorship in a company licensed u/s 25. | |||||||||
| Alternate direcorship ina company. | |||||||||
| Note ;- | Any company referred to above shall be excluded for 3 months from the date it ceases to fall within that category. | ||||||||
| 12 | Appointment of directors to be voted on individually - Sec.263 | ||||||||
| Single resolution is prohibited for appointment or reappointment of two or more persons as directors, i.e separate resoultion is required. | |||||||||
| However it can be made by a single resolution if before passing a single resoultion | |||||||||
| a resolution is passed that the appointment or reappointment shall be so made without any vote being given against it. | |||||||||
| Non applicability | |||||||||
| 1 | Private company | ||||||||
| 2 | Company licensed u/s 25. | ||||||||
| 3 | Appointments made by the company otherwise than in GM. | ||||||||
| 13 | Appointment of First Directors - Sec. 254 | ||||||||
| If Directors are named in the articles - then they shall be the first Directors | |||||||||
| If directors are not named in the articles - | |||||||||
| Manner prescribed - then as per manner specified in the articles. | |||||||||
| Manner not specified - then all the subsribers to MOA shall be deemed to be directors until direcotrs are duly appointed at a GM u/s 255. | |||||||||
| 14 | Rotational and non rotational directors - sec. 255 | ||||||||
| Rotational directors means those directors whose period of office is liable to determination by retirement by rotation. | |||||||||
| Not less than 2/3 rd of toal number of directors shall be rotational directors ( any fraction contained in that 2/3 rd shall be rounded off as one.) | |||||||||
| Articles may even provide that all the directors shall be rotational directors or all directors shall retire at AGM. | |||||||||
| Non rotaional directors are other than rotational directors. | |||||||||
| Total number of directors does not mean the maximum number of direcotrs fixed by the articles but the number of direcotrs for the time being appointed as direcotrs. | |||||||||
| Moreover additional director, alternate director, nominee directors, direcotrs appointed by CG, are not counted in the toal number of directors. | |||||||||
| Non applicability | |||||||||
| 1 | Private company. | ||||||||
| 15 | Ascertainment of Directors Retiring by Rotation - Sec. 256 | ||||||||
| 1/3 or (nearest to 1/3) of rotational direcotrs shall retire from office. | |||||||||
| On FIFO basis - by agreement - by lots. | |||||||||
| Vacancy shall be filled by reappointing the retiring director or appointing some other person (Provided conditions of sec.257 are fulfilled) | |||||||||
| Adjournment of AGM - If the place of retiring director is not filled and the meeting has not resolved not to fill the vacancy then the | |||||||||
| AGM shall adjourn to next week at the same day, time and place or suceeding day which is not a public day. | |||||||||
| Automatic reappointment in adjourned AGM - If the place of retiring director is not filled and the meeting has not resolved not to fill the vacancy then the | |||||||||
| retiring direcotr shall be deemed to be reappointed. | |||||||||
| Exceptions - Automatic reappointment shall not apply to a director if | |||||||||
| a resolution for the reappointment of retiring director was put and lost or | |||||||||
| the retiring director has given a written notice to the company of his unwillingness to be reappointed | |||||||||
| he is disqualified for appointment | |||||||||
| a resolution is required for his reappointment | |||||||||
| a resolution in contravention of section 263 is passed. | |||||||||
| Calling of a Agm is a duty of directors. Therefore, directors cannot continue in office after the last day on which agm should have been held. | |||||||||
| Non applicability - | |||||||||
| 1 | Private companies | ||||||||
| 16 | Appointment of person other than retiring directors - Sec.257 | ||||||||
| Eligibility of person | |||||||||
| A person who is not a retiring director is elgible for being appointed as a director at any gm ( AGM or EGM) if conditions of sec 257 are complied with. | |||||||||
| A person can give a notice of his own candidature or a member can propose a candidature of any other person . | |||||||||
| Notice to company at least 14 days before the GM along with Deposit Rs. 500 at the registerd office (notice given after dispatch of notice of GM ,. Still valid if it recd atleast 14 days before the GM. | |||||||||
| Company shall inform members within 7 dyas by serving individual notices or advertising in 2 newspaper | |||||||||
| Non -applicability | |||||||||
| 1 | Private companies. | ||||||||
| 17 | Appointment of proportional Representaiton - sec. 265. | ||||||||
| No statutory requirement in the act to make the appointment by proportional representation. | |||||||||
| Sec.265 applies only if the articles of a company provides for. | |||||||||
| It shall appoint at least 2/3 rd of directors by proportional representation and such appointments shall be made once in every 3 years | |||||||||
| Any casual vacany shall be filled u/s 262. | |||||||||
| Mode of voting - single transferable voting, cumulative voting, otherwise. | |||||||||
| Directors appointed under this section cannot be removed u/s 284. | |||||||||
| Sec.265 overrides the entire companies act.1956. | |||||||||
| Non-applicability | |||||||||
| 1 | Privatre company | ||||||||
| 18 | Nominee directors | ||||||||
| Provisions applicable to directors appointed by CG/ finance institutions constituted under an act of parliament. | |||||||||
| 1 | They are not liable to retire by rotation | ||||||||
| They are not counted in the total number of directors | |||||||||
| They may be appointed even if there is no provision in the articles for their appointment. | |||||||||
| They are not required to hold qualification shares | |||||||||
| Their appointment may result in increasing the strength of the board beyond the maximum number od direcotrs as specified in the articles. | |||||||||
| They can be removed only by the authority appointing them. | |||||||||
| 19 | Additional Direcotrs - Sec 260 | ||||||||
| Applicable to all companies | |||||||||
| Articles must authorise the board to appoint the additional directors | |||||||||
| Board at anytime , in its discretion, appoint additional direcotr by passing a resolution at a BM or passing a resolution by circulation. | |||||||||
| No approval of CG is required in case of appointment. | |||||||||
| Table A authorises board to apoint additional directors | |||||||||
| An additional director holds office upto the date of next AGM. | |||||||||
| If default is made in holding AGM, the additional direcotr shall vacate his office on the last day AGM ought to have been held. | |||||||||
| Alternate director - Sec 313 | |||||||||
| Applicable to all companies | |||||||||
| Articles/ resoultion At GM must authorise the board to appoint the alternate directors. | |||||||||
| Alternate director by passing a resolution at a BM or passing a resolution by circulation. | |||||||||
| No approval of CG is required | |||||||||
| There is no provision in Table A reagrding appointment of alternate direcotr. | |||||||||
| Alternate director can be appointed to act in place of an original direcotr for a period of 3 months or more from the state in which BMs are ordinarily held. | |||||||||
| Alternate director shall not hold office beyond the term permissible to the original director. | |||||||||
| appointment of an alternate director comes to an end as soon as the original direcotr returns to the state for any reason whether for the purpose of attending BM or not. | |||||||||
| Filling of casual vacancies - Sec 262. | |||||||||
| Where the office of a director comes to an end otherwise than in the normal course, such vacancy is called as casual vacancy | |||||||||
| No express power in articles is required to fill a casual vacancy | |||||||||
| Casual vacancy shall be filled only by passing a resolution at a BM. | |||||||||
| No approval of CG is required | |||||||||
| No provision of Table A | |||||||||
| Common points | |||||||||
| All the above directors are called non rotational directors | |||||||||
| Appointment of any of these direcotrs as a regular direcotr shall required compliance of sec.257, since none of these directors is a retiring direcotr. | |||||||||
| All these directors shall be required to take the qualification shares, if the articles of the company require holding of qualificaiton of shares. | |||||||||
| 20 | Appointment of direcotrs by Small shareholders. - Sec.252 | ||||||||
| Applicable to public company | |||||||||
| if the paid up capital is 5 crores or more | |||||||||
| if the number of small shareholders are 1000 or more ( small shareholders means a shareholder holding shares of nominal value of Rs. 20000 or less.) | |||||||||
| Mode of appointment | |||||||||
| by the company on suo motu appoint ssd | |||||||||
| on notice by small shareholders i.e notice given by 1/10 or more of SSD… {Notice shall be given at least 14 days before the meeting and it shall contain the name , address and number of shares held and folio number of | |||||||||
| shareholders proposing the resolution and person whose name is proposed as SSD. | |||||||||
| In case of listed company , the appointment shall be made by postal ballot. | |||||||||
| SSD has to be a small shareholder | |||||||||
| A person cannot become SSD in more than 2 companies | |||||||||
| SSD cannot be appointed as wtd/md | |||||||||
| Maximum tenure of SSD is 3 years, but can be reelected for a maximum period of 3 years | |||||||||
| SSD is not a rotational director. | |||||||||
| Disqualification u/s 274 apply to SSD but not 274 (1) (g) | |||||||||
| Vacation of office u/s 283 alos applies to SSD | |||||||||
| 21 | Removal of directors - Sec. 284 | ||||||||
| Notice (special) must be given by a mmber to company atleast 14 days before the GM. | |||||||||
| Even a single member holding one share only is eligible to give a special notice u/s 284. | |||||||||
| Copy of notice is given by company to director. | |||||||||
| Directors Gives(right) representation in wirting to company which shall be sent to mebers by company at least 7 days before the meeting | |||||||||
| If reperesentation not sent then it will be read out at the AGM. | |||||||||
| Director shall be removed if OR is passed for his removal. | |||||||||
| If or fails then director continues, - vacation of office u/s 283, - vacancu may be filled in the same GM, if sepcial notice is given - if not filled then it may be filled up u/s 262. | |||||||||
| It is the duty of the board , and not of the member proposing a resoultion, to give the explanatory statement. | |||||||||
| The articles cannot anyway restrain the shareholders from removing any director. | |||||||||
| Any other person shall be appointed at the place of director removed, only if special notice of the new appointee was given to the company. | |||||||||
| Directors who cannot be removed u/s 284 | |||||||||
| A director appointed u/s 408 & u/s265 | |||||||||
| Nominee director appointed by a financial institution constituted under special act of parliament. | |||||||||
| A direcotr of pvt company holding office for life as on 01.04.1952. ( in case appointed after 01.04.1952 then he can be removed. | |||||||||
| If the representation is defamatory as decided by CLB on application by company or any aggrieved person then | |||||||||
| CLB may order that representation need not be circulated to members/ need not be read out at the GM and moreover director liable for costs of application made to CLB. | |||||||||
| 22 | Resignation by directors. | ||||||||
| Resignation by MD/WTD - Vacation of office only on acceptance of resignation | |||||||||
| Resignation by other director - Vacation of office with immdiate effect i.e without acceptance of resignation. | |||||||||
| However if the articles require acceptance for making resignation effective or resignation is given subject to condition of acceptance then vacation of office only on acceptance of resignation . | |||||||||
| 23 | Compnesation for loss of office - Sec.318 | ||||||||
| Compensation may be paid for loss of office, or as consideration for retirement from office or in connection with such loss or retirement. | |||||||||
| Compensation can be paid only to MD, WTD,or Manager. | |||||||||
| Amount of compensation - | |||||||||
| Lower of the unexpired tenure of direcotship or 3 years. | |||||||||
| Basis - Average remuneration actually earned during 3 years immediately preceding the date of cessation of office, or such shorter period for which the director has held his office. | |||||||||
| Prohibition of compensation in following cases. | |||||||||
| Reconstruction or amalgamation of company takes place and director resigns but is appointed as MD or manager or any other officer of the recontructed or amalgamted company. | |||||||||
| Director resigns voluntarily | |||||||||
| Office of director is vacated u/s 203 or 283. | |||||||||
| Director has instigated or is responsible for the termination of his directorship. | |||||||||
| company is wound up due to negligence of director. | |||||||||
| Direcotr is guilty of fraud or breach of trust or gross negligence in the conduct of the company. | |||||||||
| Mere allegations on a direcot does not entitle him from receiving compensation. | |||||||||
| 24 | Consent to act as director - Sec. 264. | ||||||||
| Every person proposed as a director shall file his consent with the company before appointment | |||||||||
| Exception - A direcotr retiring by rotation or otherwise ( i.e on expiry of his term) and person who files his candidature u/s 257. | |||||||||
| No person shall act as direcotr unless he has filed his consent with the registrar within 30 days of his appointment. | |||||||||
| Exception - A director reapointed after retirement, additional director, alternate director, person filling casual vacany as a director, person named in the articles as first registered.. | |||||||||
| Non applicability :- | |||||||||
| 1 | Private limited company | ||||||||
| Note :- A minor cannot be appointed as a director in a public company since he is not competent to contract..so he cannot file his consent. | |||||||||
| Similarly in case of private company also if the articles provides so.. | |||||||||
| 25 | General powers of the Board - Sec.291 | ||||||||
| Board is entitled to do all such powers /acts as the company is authorised to exercise. | |||||||||
| Therefore Powers of the board are co- extensive with the powers of the company, what the company can do, the board can do. | |||||||||
| Powers exerciseable subject to the provisions of co's act, MOA, AOA, any other act. | |||||||||
| Powers can exercised by passing a resolution at a BM, or by circulation/ delegating its powers to adirector or committee of directos, or any other officer. | |||||||||
| However Board shall not exercise any power which is required to be exercised in GM whether by co's act, any other act, memorandum or articles. | |||||||||
| The Sh. Holders are empowered to impose restrictions on powers of board through the articles or by passing a resolution at aGM. | |||||||||
| But restrictions can be imposed prospectvely and not retrospectively. | |||||||||
| The board is the supreme body having the management of the company. | |||||||||
| Shareholders cannot interefere in the day to day management of the company. | |||||||||
| Shareholders cannot supersede/usurp the Board's powers, or instruct it as to how it shall exercise its powers. | |||||||||
| Even a unanimous resolution of the shareholders will not enable to sh. Holders to exercise the powers of the board. | |||||||||
| However sh. Holders can exercie all powers of the board | |||||||||
| where the board has been acting malafide/ board in incompetent to act/ if there is a deadlock in the board. | |||||||||
| 26 | Powers exercisable only at a BM - Sec. 292 | ||||||||
| Powers requiring a resolution at a BM | |||||||||
| 1 | Making calls on shares | ||||||||
| 2 | Authorising buy back ..buyback shall not exceed 10 % of (Pd up capital and free reserves), and no further buyback shall be made in next 365 days. | ||||||||
| 3 | Issuing debentures | ||||||||
| 4 | Borrowing money otherwise than on debentures | ||||||||
| 5 | investing funds of the company | ||||||||
| 6 | Making loans to any person. | ||||||||
| Delegation of powers | |||||||||
| 1 | Powers mentioned in 4,5,6 above may be delegated by the board sub.to following 3 conditions | ||||||||
| Resolution delegating powers is passed at a BM | |||||||||
| Powers may be delgated to any committee of direcotrs, MD, Manager, any other officer of company. | |||||||||
| Resolution delegating such powers shall specify the following particulars | |||||||||
| In case of borrowal of amount - Amount that can be borrowed. | |||||||||
| In case of investment of funds - Amount may be invested and the nature of investments. | |||||||||
| In case of power to make loans- the toal amount that may be lent, purpose of making loans. | |||||||||
| 2 | Power to make intercorporate loans and investments cannot be delegated by the board of directors of a public company. | ||||||||
| 27 | Restrictions on power of board - Sec. 293. | ||||||||
| Board of a public company shall not exercise the following powers except with the consent of the shareholders in GM. | |||||||||
| 1 | Sale of undertaking - ( in case of listed company, instead of passing resolution in GM, pass the resolution by postal ballot. | ||||||||
| 2 | Remission, or give time for the repayment of a debt due by a director. | ||||||||
| 3 | Investment of compensation received by way of compulsory acquisition of any undertaking. However no consent of shareholders reqd if such compensation is invested in trust securities specified u/s 20 of the Indian Trust act. | ||||||||
| 4 | Borrowing of money if | ||||||||
| money already borrowed, together with moneys proposed to be borrowed will exceed the toal of pd up capital and free reserves. | |||||||||
| Temporary loans obtained from company's bankers in the ordinary course of business are not considered as borrowings | |||||||||
| Temporary loans inlcude loan repayable on demand/ loans repayable within 6 months of the date of the loan., but does not inlcude loans raised for financing | |||||||||
| If the board borrows money in excess of the limits imposed u/s sec.293, the shareholders may ratify such excess borrowings. | |||||||||
| Any excess borrowing shall not be valid and effectual against the company, unless the lender proves that he lent the money in good faith and he lent the money w/o having any knowledge that the limit imposed u/s 293 had been exceeded. | |||||||||
| GM resolution must specify the maximum amount which can be borrowed by the board, if not sepcified then the resolution shall be void. | |||||||||
| 5 | Contribututions to any charitable fund or any other fund not relating to the business of the company or any fund not directly relating to the welfare of its employees | ||||||||
| GM shall specify the amount to be contributed by board. | |||||||||
| Exceptions - Contribution upto Rs. 50000/- in a FY shall not require approval of shareholders in GM/ | |||||||||
| Contributions upto 5% of average net profits during 3 immdeiately preceding FY's shall not require approval of shareholders in GM. | |||||||||
| 28 | Restrictions on political contributions - Sec. 293 A | ||||||||
| 1 | Contribution to any political party - including contribution made foradvertisement in any publication if such publication is by or on behalf of a political party. | ||||||||
| 2 | Contribution to any other person - for a political purpose i.e. a donation which is likely to effect public support for a political party. | ||||||||
| 3 | Government company and any company which is in existence for less than 3 Fys are prohibited from making any political contribution. | ||||||||
| 4 | The total amount of political contribution in a FY shall not exceed 5 % of average net profits during 3 immediately FY's | ||||||||
| 5 | The political contribution shall be made by passing a resolution at a BM only. | ||||||||
| 6 | Amount of political contribution and name of the political party or the person to whom poltical contribution has been made needs to be disclosed in the P& L a/c | ||||||||
| 7 | Penalty for contravention is fine upto 3 times the amount so contributed and imprisonment upto 3 years and fine for officers in default. | ||||||||
| 29 | Contribution to national defence fund - Sec.293 B | ||||||||
| 1 | Contribution to National defence fund, PM national relief fund, any other fund notified u/s 293 B | ||||||||
| 2 | Contribution by board whether by passing a resolution in a BM or by a circulation. | ||||||||
| 3 | by Any person to whom the powers of the board have been delegated. | ||||||||
| 4 | through GM | ||||||||
| 5 | Condtitions- Disclosure in P & L a/c | ||||||||
| 6 | The company has the power to make contribution u/s 293 B notwithdtanding anything contained in the companies act or the memorandum or the articles. | ||||||||
| 30 | Loan to directors - Sec. 295 | ||||||||
| Sec 295 is attracted | |||||||||
| 1 | If a company makes any loan to a specified director. | ||||||||
| 2 | If a company gives any guarantee or provides any security to a specified person who gives loans to any other person | ||||||||
| If a company gives any guarantee or provides any security to any person who gives a loan to specified person. | |||||||||
| Specified persons means | |||||||||
| 1 | A director of lending company or of a company which is its holding company. | ||||||||
| 2 | A relative of any such director. | ||||||||
| 3 | A partner of any such director. | ||||||||
| 4 | A firm in which any such director or relative is a partner. | ||||||||
| 5 | A private company of which any such direcotr is a director or member.(but not the relative of director.) | ||||||||
| 6 | A body corporate at a GM of which 25% or more voting power is exercised by any such direcotr, or by two or more such directors together. | ||||||||
| 7 | A body corporate , the board or MD or manager whereof is accustomed to act in accordance with the directions of the board or any director of the lending company. | ||||||||
| Note ;- Sec.295 shall applu only if the contract isentered into between the company and any of the above persons. | |||||||||
| 3 | Previous approval of CG is required in every case falling u/s 295. | ||||||||
| 4 | No applicability ;- | ||||||||
| Private company | |||||||||
| Loan given by a holding company to its subsidiary company | |||||||||
| Guarantee given or security provided by a holding compnay to any other person in respect of a loan made to its subsidiary company. | |||||||||
| 5 | Sec.295 shall apply to any transaction represented by a book debt which was from its inception in the nature of a loan or an advance. | ||||||||
| 6 | Loan means advance of money ( i.e Financial assistance) upon the understanding that it shall be paid back. | ||||||||
| Loan may or may not carry interest. | |||||||||
| Indirect loan means loan given by a company to a specified persons through the agency of one or more intermediaries. | |||||||||
| 7 | A bonafide salary advance given to the wife of MD does not attract sec. 295. | ||||||||
| 8 | No retrospective effect of sec.295. i.e if a pvt company after making a loan to specified person, is converted into a public company. | ||||||||
| 9 | No restrictions on business advance, i.e for the purpose of business of the company. E.g security deposit given by a company in respect of a house taken by the company. For residential accomodation of MD. | ||||||||
| 31 | Board's Sanction required for certain contracts Sec. 297. | ||||||||
| Applies to all companies, whether Public or private. | |||||||||
| Applies only when the contract is made between the company and any specified person AND the contract is a specified contract. | |||||||||
| Specifed contract mean a contract for sale , purchase or supply of any goods, materials or services and / or contract for underwriting the subscripttttion of shares or debentures. | |||||||||
| Specified persons means | |||||||||
| 1 | A director of the company. | ||||||||
| 2 | A relative of any such director. | ||||||||
| 3 | A partner of any such director. | ||||||||
| 4 | A firm in which any such director or relative is a partner. | ||||||||
| 5 | A private company of which any such direcotr is a director or member.(but not the relative of director.) | ||||||||
| Legal requirements us. 297. | |||||||||
| If Pd up capital of the company is less than Rs. 1 crore. | |||||||||
| Previous approval of board must be obtained by passing a resolution at a BM only | |||||||||
| Not required if the circumstances are of urgent necessity and the consent of board is obtained by passing a resolution at a BM within 3 months of entering into such a contract. | |||||||||
| In casae of contravention the contract is voidable at the option of board i.e contract shall become void only when the board takes some action to rescind such contract. | |||||||||
| If pd up capital of the company is 1 crore or more. | |||||||||
| Previous approval of board must be obtained by passing a resolution at a BM only | |||||||||
| Prvious approval of CG must be obtained. | |||||||||
| In cae of contravention , the contract is void ab initio. | |||||||||
| Exemptions u/s sec. 297. | |||||||||
| 1 | If the contract is made for cash and at prevailing market price. | ||||||||
| 2 | IF the value of such contracts is not more than Rs. 5000/- in a year. | ||||||||
| 3 | Banking company. | ||||||||
| 4 | Insurance company. | ||||||||
| Non applicability | |||||||||
| 1 | Contracts for sale or purchase of immovable property | ||||||||
| 2 | Contracts for supply of any services relating to immovable property | ||||||||
| 3 | Employment contracts | ||||||||
| 4 | Contract for rendering professional services | ||||||||
| No retrospective effect. | |||||||||
| Therefore approval of CG is not reqd if after entering in to contract the paid up capital of company increased to 1 crore or more. | |||||||||
| Sec 297 not attracted with, if a company enters into a contract with a person who is not a specified person and afterward such person becomes a specified person. | |||||||||
| 32 | Disclosure of interest by direcotrs - sec. 299. | ||||||||
| 1 | Disclosure of interest by every director who is anyway directly or indirectly concerned or interested in a contract or arrangement or any proposed contract or arrangement shall disclose his interest. | ||||||||
| 2 | Failure to disclose the NATURE OF HIS INTERST would not result in vacation of office provided the director has made a disclosure of his interest. | ||||||||
| 3 | Disclosure must be made at the first BM held after the director becomes so concerned or interested | ||||||||
| In case of proposed contract when the director is interested, disclosure must be made at the BM held when the contract is first considered by the board. | |||||||||
| 4 | Alternative mode of disclosure | ||||||||
| 1 | if the director is a director or a member in a body corporate and the direcotr that he is to be regarded s concerned or interested in every contract which may be entered into with that body corporate in future. | ||||||||
| - | The notice is effectice only if it is given at a BM and the notice shall expire at the end of the FY in which it is given. | ||||||||
| 2 | if the director is a partner in a firm and the director agrees that he is to be regardeds concerned or interested in every contract which may be entered into with that firm in future. | ||||||||
| - | The notice is not given at BM but the director concerned takes reasonable steps to secure that it is brought up and read at the first BM held after it is given. | ||||||||
| The notice may be renewed for 1 FY at a time and the renewal shall not be made earlier than the last month in which the general notice is due to expire. | |||||||||
| 5 | Exemptions u/s 299. | ||||||||
| 1 | If the interest of one or more directors of the company is not more than 2% of paid up share capital of other company.if it exceeds then no expetion shallbe available to any of the directors of the company. | ||||||||
| 6 | Disclosure is not required if interest is already known to all directors | ||||||||
| 7 | Interested director - The relationship of husband and wife, father and son, brother and sister are capable of influencing the judgement of a person and thereofre in such cases the director shall be an interested director. | ||||||||
| If a relative of a direcot is concerned or intersted, the director is interested. | |||||||||
| 8 | Consequences of failure to disclose interest - The defaulting direcotr shall vacate the office of director but the contract does not become illegal, void or unenforceable. | ||||||||
| 33 | Interested direcotr not to participate or vote - Sec. 300 | ||||||||
| Prohibition on interested director in respect of the contract in which he is concerned or interested - like | |||||||||
| Counting for the purpose of quorum. | |||||||||
| Participating in the discussion | |||||||||
| Voting | |||||||||
| Vote of interested director shall be void | |||||||||
| Validity of contracted does not become void or unenforceable . The transaction is voidable at the option of the board but not at the option of the other party. | |||||||||
| Voting by an interested director will make the resolution of the board void in the following 2 cases. | |||||||||
| - | If his exclusion from quorum would have resulted in a situation of no quorum. | ||||||||
| - | If exclusion of his vote would have resulted in failure of such revolution. | ||||||||
| Non-Applicability of Sec. 300 | |||||||||
| 1 | Private company. | ||||||||
| A Public company which has been exempted by CG | |||||||||
| A contract of indemnity against any loss which the directors may suffer by reason of being sureties for the company. | |||||||||
| A contract with a public company in which the sole interest of the director is holding not more than 2% of the paid up share capital of such other public company. | |||||||||
| In case the shareholding of nominee director who was appointed by a public company in another public company does not exceed the qualification shares specified in the articles of such other public company. | |||||||||
| Non applicability of sec.299 and sec.300 shall not apply if a contract in which a direcotr is interested is put for discussing and voting in a GM. | |||||||||
| 34 | Appointment of MD/WTD/Manager - Sec. 269 | ||||||||
| Every company shall compulsorily appoint MD or WTD or a Manager if it fulfills the following two conditions. | |||||||||
| The company is a public company | |||||||||
| The paid up capital of the company is Rs.5 crores or more. | |||||||||
| Mode of appointment | |||||||||
| (A) | The appointment may be made with the approval of CG. | ||||||||
| (B) | The appointment may be made without the CG approval, provided such appointment is in accordance with schedule XIII. | ||||||||
| (A) | The company shall make application to CG within 90 days of making the appointment | ||||||||
| CG shall not grant the approval if it is satified that the appointedd is not a fit and proper person/ it is not in the public interest/terms and conditions are not fair and reasonable. | |||||||||
| CG may grant the approval for a lesser period than applied. | |||||||||
| If CG does not approve then the person appointed as the managerial person shall vacate his office with efect from the date of communication of decision of CG and he shall not be required to refund to the company the remuneraion already recvd by him. | |||||||||
| (B) | The appointment may be made without obtaining the approval of CG if, | ||||||||
| such appointment is made in compliance with the provisions of schedule XIII, and a return is filed with ROC within 90 days of appointment. | |||||||||
| If appointment made without the approval of CG and also in contravention of schedule XIII. | |||||||||
| then CG may make a reference to CLB for enquiry by CLB and its decision thereon. | |||||||||
| CLB shall issue a show cause notice to all the concerned parties. | |||||||||
| CLb may make an order of termination of appointment if it comes to the conclusion that it was in contravention. | |||||||||
| Consequences - Managerial person may vacate the office- but acts done shall be valid- remuneration should be refunded- company shall not waive recovery of remuneration from him. | |||||||||
| 35 | Requirements for appointment of amanagerial person as per schedule XIII | ||||||||
| He has not been imprisoned for anytime for any economic offence. | |||||||||
| He has not been fined for more than Rs.1000 for any econmic offence. | |||||||||
| He has not been detained for any period under conservation of foreign exchange and prevention of smuggling activities act, 1974. | |||||||||
| He must be resident in india. | |||||||||
| Appointment wthout SR - He must have completed the age of 25 years and he must not have attained the age of 70 years. | |||||||||
| Appointment by SR - He has completed the age of 18 years and has not attained the age of 25 years. Or he has completed the age of 70 years. | |||||||||
| The appointment and remuneraion shall be approved in GM | |||||||||
| A return shall be filed with the registrar within 90 dyas of appointment | |||||||||
| 36 | Managerial remuneration - Sec. 198, 309,387, schedule XIII, etc. | ||||||||
| (A) | Remuneration of a director who is not a MD/WTD i.e non -executive directors, i.e ordinary directors. | ||||||||
| Mode of payment may be monthly , quarterly or annual payment. | |||||||||
| Approval of CG is required. | |||||||||
| Remuneration shall be Max 1% of net profits if the company has employed MD, WTD or manager. | |||||||||
| Remuneration shalle be max 3% of net profits if the company has not employed MD, WTD or manager. | |||||||||
| Payment of commission to Non wholetime direcotrs/non-executive directors/ordinary directors. | |||||||||
| Company must SR approving the payment of commission | |||||||||
| SR shall remain inforc for 5 years only and may be renewed from time to time. | |||||||||
| Approval of CG is not required if the total commission does not exceed 1% & 3 % rule. | |||||||||
| Payment of sitting fees to Non wholetime direcotrs/non-executive directors/ordinary directors. | |||||||||
| Sitting fees is payable only to an ordinary direcotr.i.e no sitting fees can be paid to WTD/MD, if paid then it shall be treated as payment of managerial remuneration. | |||||||||
| Sitting fees is payable only once where a BM is adjourned and again held, since adjourned BM is a mere continuation of the original BM. | |||||||||
| It is permissible to pay sitting fees for meetings of the committee. | |||||||||
| Sitting fees can be paid even if the company has incurred a loss. | |||||||||
| Amount of sitting fees per director per BM | |||||||||
| Maximum Rs.20,000/- if the aggregate of paid up share capital and free reserves of the company is Rs.10 crores or more OR Turnover of the company is Rs.50 crores or more. | |||||||||
| Maximum Rs.10,000/- in any other case. | |||||||||
| (B) | Remuneration to MD/WTD/Manager. | ||||||||
| {1} | Remuneration as per Section 198,309 and 387. | ||||||||
| - Overall remuneration shall not exceed 11% of net profits. | |||||||||
| - It is mandatory to charge depreciation to arrive at net profits. | |||||||||
| Mode of payment is monthly and or specified percentage of net profits to MD/WTD/Manager. | |||||||||
| Amount of remuneration is 5% of N.P.if the company has employed one WTD or MD | |||||||||
| Amount of remuneration is 10% of N.P.if the company has employed more than one WTD or MD. | |||||||||
| Amount of remuneration is 5% of N.P in case of manager. | |||||||||
| {2} | Remuneration as per Schedule XIII ( section II of part II of schedule) | ||||||||
| 1 | Calculate Effective capital i.e items to be added pd up capital, securites premium account, reserves and surplus, long ter loans, deposits repayable after 1 year. And items to be deducted is investments, accumulated losses, preliminary expenses not written off. | ||||||||
| 2 | If appointment is made in the year in which compnay has been incorporated then the effective capital shall be calculated as on the appointment of managerial person. | ||||||||
| 3 | In any other case, the effective capital shall be calculated as on the last day of preceding FY. | ||||||||
| 4 | If effective capital is | Option 1 | Option 2 | ||||||
| EC < 1 crore | 75000 | 150000 | |||||||
| EC< 5 crore | 100000 | 200000 | |||||||
| EC< 25 crore | 125000 | 250000 | |||||||
| EC< 50 crore | 150000 | 300000 | |||||||
| EC< 100crore | 175000 | 350000 | |||||||
| EC >= 100 crore | 200000 | 400000 | |||||||
| Option 1 | Conditions to be fulfilled | ||||||||
| Remuneration has been approved by a ' Remuneraion committee' | |||||||||
| There is no default in repayment of debts, public deposits, debentures or interest payable thereon, for a continous period of 30 days in the preceding FY before the appointment of managerial remuneration | |||||||||
| Option 2 | All the conditions given under option 1 must be fulfilled, | ||||||||
| SR shall be passed in the GM of the company. SR shall remain valid for 3 years only. | |||||||||
| Remuneration as per Schedule XIII ( section I of part II of schedule) | |||||||||
| Amount of remuneration is 5% of N.P.if the company has employed one WTD or MD | |||||||||
| Amount of remuneration is 10% of N.P.if the company has employed more than one WTD or MD. | |||||||||
| Remuneration shall include Basic Salary, DA, other allowance, perquisites, commission. | |||||||||
| C | Miscellaneous points | ||||||||
| The remuneration shall be payable to the directors shall be determined or increased by the articles of the company or by OR or by SR, where the articles so require. | |||||||||
| The remuneraiton payable to a director for rendering services in any other capacity shall also be covered in ' overall managerial remuneration' and other limits specified under the act. | |||||||||
| However remuneration paid for rendering services in any other capacity shall not be included if the services are rendered in a professional capacity and CG has expressed the opinion that the director concerned possesses requisite professioanl qualifications. | |||||||||
| Guarantee comission paid to a director cannot betreated as apart of managerial remuneration since the direcotr does not render manual, clerical, technical service etc…. | |||||||||
| Guarantee commission is paid to compensate the director for the risk which he bears which has nothing to do with his directorship. | |||||||||
| Remuneration exceeding the limits may be drawn after obtaining the approval of CG.if approval not obtained then excess remuneraiton shall be repaid to the company and the company shall not waive the recovery. | |||||||||
| D | Non applicability | ||||||||
| 1 | Private limited company. | ||||||||
| 37 | Increase in remuneration of direcotrs - Sec.310 & 311. | ||||||||
| Increase in sitting fees- | |||||||||
| If increased sitting fees is within the prescribed limit then no approval of CG is required, if not then approval of CG is required. | |||||||||
| Increase in remuneration of a managerial person | |||||||||
| If increased remuneration is within the limits prescribed under schedule XIII or limits prescribed u/s 198, 309, and 387 then no approval of CG is required, if not then approval of CG is required. | |||||||||
| Increase in remuneration of a non -executive director | |||||||||
| If increased Remuneration is within the prescribed limit then no approval of CG is required, if not then approval of CG is required. | |||||||||
| Non - Applicability | |||||||||
| Sec. 310 & 311 do not applyto a private company. | |||||||||
| 38 | Director etc. not to hold office or place of profit -Sec. 314 | ||||||||
| (A) | Sec. 314 (1) + first proviso | ||||||||
| Hold OPP | |||||||||
| SP------------------------------------------------>Company/subsidiary | |||||||||
| I | SR- Before holding OPP; or | ||||||||
| I | SR- First GM held after holding OPP | ||||||||
| I | |||||||||
| I | |||||||||
| I | |||||||||
| I | |||||||||
| \ / ------------------------------------------------------ > | |||||||||
| Director | Other sp | ||||||||
| I | I | ||||||||
| I | I | ||||||||
| \ / | \ / | ||||||||
| OPP carrying any remunerations | OPP carrying monthly remuneration >= Rs. 50,000/- | ||||||||
| (B) | Sec. 314 (1) + second proviso | ||||||||
| IF Appointment at OPP | |||||||||
| without the knowledge of director | |||||||||
| Relative or Firm (Relative is a partner) -------------------------------------------------------------------------------------------------------->Company/subsidiary | |||||||||
| SR- First GM held after holding OPP or | |||||||||
| SR - 3 months of appointment | |||||||||
| Whichever is later | |||||||||
| © | Sec. 314 (1B) | ||||||||
| SP--------------------------------------------------------------------------------------Company | |||||||||
| I | SR- Before holding OPP; or | ||||||||
| I | CG - Previous approval | ||||||||
| I | |||||||||
| I | |||||||||
| I | |||||||||
| I | |||||||||
| \ / ------------------------------------------------------ > | |||||||||
| Other sp | |||||||||
| I | I | ||||||||
| I | I | ||||||||
| \ / | \ / | ||||||||
| OPP carrying monthly remuneration >Rs.2, 50,000/- | |||||||||
| (D) | Professional services and services rendered on retainership basis. | ||||||||
| 1 | Director + Renders professional services e. g. advocate/ CA/ Doctor who gives his opinion or consultancy in a particular case referred to him - then holding of OPP? - No. | ||||||||
| 2 | Director + Renders professional services on a retainership basis e. g. advocate/ CA/ Doctor who is bound to accept all the cases referred to him - then holding of OPP? - Yes. | ||||||||
| 39 | MD , WTD, Manager | ||||||||
| 1 | MD is adirecotr first, i.e only a director can become MD of the company, if MD cease to be a director then he automatically ceases to be MD. | ||||||||
| 2 | MD is entrusted with substanital powers of management. Power to do adminstrative acts are not deemed to be substantial powers of management. | ||||||||
| 3 | Md exercises his powers subject to the superintendence, control, and direction of board. | ||||||||
| 4 | Only individaul can be appointed as MD | ||||||||
| 5 | Md can be appointed for a maximum period of 5 years. | ||||||||
| WTD | Wholetime direcotr inlcudes a direcotr in the whole time employment of the compnay. | ||||||||
| Only an indiviual can be appointed as WTD. | |||||||||
| Tenure of office of WTD may exceed 5 years. | |||||||||
| Notes :- | MD/ WTD may be a rotational or a non rotational director. | ||||||||
| An additional direcotr may be appointed as MD/ WTD | |||||||||
| Manager | A Manager need not be a director. However a director may be appointed as a manager... | ||||||||
| Manager means a person who has the management of the whole or substantially the whole of the affairs of a company. | |||||||||
| Manager exercises his powers subject to the superintendence control and drection of the board. | |||||||||
| Only an individual can become a manager. | |||||||||
| Manager can be appointed or reappointed for a maximum period of 5 years. | |||||||||
| 40 | Disqualifications and vacation of office of MD & WTD - Sec.267 | ||||||||
| Applies to all companies , public as well as private. | |||||||||
| Grounds for disqualification | |||||||||
| Undischarged insolvent | |||||||||
| A person who at anytime in the past adjudged as an insolvent. | |||||||||
| A person who is convicted by a court of an offence involving moral turpitude. | |||||||||
| A person who has , at anytime in the past, convicted by a court of an offence involving moral turpitude. | |||||||||
| A person who suspends payment or makes a composition with his creditors | |||||||||
| A person who at anytime in the past ,had suspended or made a composition with his creditors. | |||||||||
| 41 | Disqualifications and vacation of office of Manager - Sec. 385 | ||||||||
| Applies to all companies , public as well as private. | |||||||||
| Grounds for disqualification | |||||||||
| Undischarged insolvent | |||||||||
| A person who at anytime in the preceeding 5 years adjudged as an insolvent. | |||||||||
| A person who is convicted by a court of an offence involving moral turpitude. | |||||||||
| A person who has , at anytime in the preceding 5years, convicted by a court of an offence involving moral turpitude. | |||||||||
| A person who suspends payment or makes a composition with his creditors | |||||||||
| A person who at anytime in the preceeding 5 years ,had suspended or made a composition with his creditors. | |||||||||
| Exemption by CG - by notification in the offical Gazette remove any qualifications specified u/s 385. | |||||||||
| 42 | Term of appointment of MD - Sec. 317. | ||||||||
| MD can be appointed for a maximum period of 5 years. | |||||||||
| Md can be reappointed for a further period of maximum 5 years. | |||||||||
| Reappointment of MD cannot be made earlier than 2 years before expiry of his term. | |||||||||
| The provisions of sec.317 shall also apply to a manager. | |||||||||
| Non-applicability | |||||||||
| 1 | Private company. | ||||||||
| 43 | Number of managing direcotrship - Sec. 316 | ||||||||
| Generally a public company shall not appoint or employ any person as MD, if he is either MD or manager of any other company except as provided u/s 316 (2) or 316 (4) | |||||||||
| Sec. 316 (2) - | |||||||||
| A person is proposed to be appointed as MD in a public company. & he is already MD or Manager in any other company. | |||||||||
| Conditions | |||||||||
| 1 | The person is MD or manager in only one company. | ||||||||
| 2 | His appointment is approved by passing a resolution at a BM only. | ||||||||
| 3 | The resolution at the BM is passed with the consent of all the direcotrs present, i.e., by a unanimous resoultion | ||||||||
| 4 | Specific Notice of such resolution is given to all the directors. | ||||||||
| Sec. 316 (4) | |||||||||
| CG May permit a person to be appointed as MD of more than two companies, if CG is satisfied that - | |||||||||
| 1 | The companies should function as a single unit and, | ||||||||
| 2 | The companies should have a common MD. | ||||||||
| 44 | Number of managerships - Sec. 386 | ||||||||
| Generally a public company shall not appoint or employ any person as MD, if he is either MD or manager of any other company except as provided u/s 386 (2) or 386 (4) | |||||||||
| Sec. 386 (2) - | |||||||||
| A person is proposed to be appointed as MD in a public company. & he is already MD or Manager in any other company. | |||||||||
| Conditions | |||||||||
| 1 | The person is MD or manager in only one company. | ||||||||
| 2 | His appointment is approved by passing a resolution at a BM only. | ||||||||
| 3 | The resolution at the BM is passed with the consent of all the direcotrs present, i.e., by a unanimous resoultion | ||||||||
| 4 | Specific Notice of such resolution is given to all the directors. | ||||||||
| Sec. 386 (4) | |||||||||
| CG May permit a person to be appointed as MD of more than two companies, if CG is satisfied that - | |||||||||
| 1 | The companies should function as a single unit and, | ||||||||
| 2 | The companies should have a common MD. | ||||||||
| 45 | Validity of Acts of directors - Sec. 290 | ||||||||
| All acts done by a person as adirecotr shall be valid notwithstanding that it is afterwards discoverd that- his appointment was invalid by reason any defect or disqualification. | |||||||||
| Acts done by a director in his capacity as MD or manager are not validated u/s 290. however all the prior acts of such a managerial person before declaration by CLB as contravention, remain valid. | |||||||||
| Following acts of a director are invalid- | |||||||||
| 1 | Where the appointment is illegal or no appointment at all. | ||||||||
| 2 | Acts done after the appointment of a director has been shown to the company as invalid or terminated | ||||||||
| 3 | Where the acts done are ultravires the company. | ||||||||
| 4 | Where requirement as to minimum number of direcotrs was never satisfied | ||||||||
| 5 | Where quorum is not present at a BM. | ||||||||
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